JERUSALEM – A top negotiator for Yasser Arafat said yesterday the PLO leader has been told President Bush is putting together a Mideast peace plan that calls for the creation of a Palestinian state with a foothold in Jerusalem.

Nabil Shaath said the Palestinian Authority was briefed on details of the American plan by Arab leaders in Egypt and Saudi Arabia, with whom, he claimed, the U.S. has been discussing a political solution to the Palestinian-Israeli crisis.

Shaath said that, according to the information received about the American plan, Islamic and Christian holy places in Jerusalem would be put under Palestinian “supervision.”

The United States has not presented Israel or the Palestinians with a new U.S. peace proposal, officials from both sides said. But in Washington, a U.S. official confirmed that a Mideast proposal is in the works and should be ready in about a month.

The only official Israeli reaction to Shaath’s remarks came from Foreign Minister Shimon Peres, who said the Palestinian account of the Bush peace initiative included “positive elements.”

A top Israeli official told The Post that “Israel has said in the past that it would be willing to deliberate such a possibility as long as it would not endanger the security of Israel, that it would provide real peace for the next generations of the Israelis, and that it would be carried out in phases.”

The official added, “If the Palestinians put an end to the violence for more than a year, Israel has committed itself to go along with the Mitchell plan.”

The Mitchell plan – named for its chief architect, former Sen. George Mitchell – calls for a six-week cessation of hostilities, followed by a cooling-off period during which Israelis and Palestinians would discuss implementing confidence-building measures that would ultimately lead to the resumption of peace talks.

While Israeli and Palestinian officials met yesterday to discuss a cease-fire, the Israelis reported shooting and other outbreaks of violence by Palestinians throughout the day in the Gaza Strip and the West Bank. There were no immediate reports of casualties.

The Palestinians said Israeli troops along the Gaza Strip’s border with Egypt fired on a Palestinian neighborhood, injuring four civilians. They also said Israeli tanks and bulldozers had destroyed agricultural land near Gaza City under the cover of heavy fire.

There also were a number of Palestinian demonstrations against the U.S. anti-terrorism offensive in Afghanistan.

In the West Bank cities of Ramallah and Nablus, thousands of Palestinians protested the American-led campaign.